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A02087 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
TITLE OF BILL: An act to amend the tax law, in relation to establishing small business savings accounts PURPOSE OR GENERAL IDEA OF BILL: This bill would allow small businesses to make contributions into a small business tax-deferred savings account to which the monies in such account may be withdrawn tax free during times of specified economic hardship, for the purpose of job retention or creation, or times where the Governor deems it a natural disaster to warrant assistance from the federal government. SUMMARY OF PROVISIONS: Section 1: states that this act shall be known and may be cited as the "savings accounts for a variable economy (SAVE) for small businesses act". Section 2: amends the tax law by adding a new section 48. Section 3: amends section 209 of the tax law by adding a new subdivision 13. Section 4: amends subsection (c) of section 612 of the tax law by adding a new paragraph 47. Section 5: sets the effective date JUSTIFICATION: More than 170,000 small businesses were lost after the economic downturn of 2008 and many that survived are still having trouble obtaining loans and credit to help them stay open. The economic climate that small busi- nesses are facing has only grown more challenging as a result of the COVID-19 pandemic. As New York continues to aggressively respond to the impacts of the pandemic, it is imperative that we learn the lessons from this public health crisis and be prepared for future emergency situations. This bill seeks to serve as a remedy for the challenges that small businesses face by encouraging them to put money into a special savings account that can be used tax-free in times of economic hardship, for the purposes of job retention or creation, and during natural disasters. PRIOR LEGISLATIVE HISTORY: 2021-2022: A.4824A Referred to Ways and Means 2019-2020: A.7693 Referred to Ways and Means 2017-2018: A.3434 Referred to Ways and Means 2015-2016: A.6031A Referred to Ways and Means FISCAL IMPLICATIONS: Approximately $20 million (dependent on how many eligible small busi- nesses opt in). EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years beginning after such date.